Friday, September 7, 2007

Countrywide, Las Vegas Sands and Intel

I will start by beating the same horse again, the financials. You can slice and dice them any way you want they are sick, sick, sick. This is a major problem that is not going away in a quarter like some may think. Do not let the value players who are purported buying financials sway your analysis in any way. They are cheerleaders and pump artists talking their own position. I have been reading reports of analysts watching insiders buying mortgage lenders(ie. Luminent ticker LUM) and viewing this as bullish. I agree that insider buying is favorable but you must remember that these 'insiders' are not immune to bias and color any more than the numerous zombie like football fans of the Detroit Lions (of which I must admit I am one) are. They are human and rooting for their stock(team) no matter how bad things have become, is natural. Besides they need to develop a market unto which they can unload their stock holdings a la Angelo Mozilo. Caveat emptor.

Speaking of Mr. Mozilo and Countrywide, is it not curious that the stock has fallen below the $18 strike of the convertible preferred Bank America took. Is it not curiouser the lack of coverage/commentary by CNBC on this issue, just another reminder to do your own homework and follow your own judgement. I surmise that their is some discussion going on at BAC right now. Maybe they are going to average down their position again, as if were a bargain before it must be a bigger bargain now ! I would humbly suggest they bring on Nick Leeson to help them co-ordinate this dollar cost averaging as he is expect at it. Just ask the Queen, she will vouch for him as he took down her bank doing it.

The above chart is a daily view of Las Vegas Sands. This low volume rally is classic, the longs should take it for what it is a gift to get out and if inclined go short.

The chart above is a daily view of tech bellwether Intel. I want to caution you that tech may not be the safe harbour that the financial media is portraying it as. Remember that little item of stock option backdating ? It has not gone away and will reappear soon, so be ready to deal with that if you are gonna play tech. I wish the SEC was a stock cause it is breaking out which is not good for this market. Good trading to you all.

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